Settlement Options

Conversion into common stock of the insurer — The standard life insurance settlement options are lump sum, fixed amount, fixed period, life income (straight life, life with period certain, refund life income, joint and survivor), and interest only. Converting the death proceeds into the insurer's common stock is not a settlement option; stock ownership is a separate matter and not how death proceeds are distributed under a life policy.

National insurance concept

Guaranteed issue annuity — The standard settlement options for paying life insurance proceeds are lump sum, interest-only, fixed-amount installments, fixed-period installments, and life income. A guaranteed issue annuity is an annuity product issued without medical underwriting; it is not a method of settling death proceeds. Settlement options give the beneficiary flexibility in how the proceeds are received, and under California law (CIC Section 10170(f)) the beneficiary generally may choose among the available options, with a retained-asset account permitted as a default only with clear disclosure.

CA-specific example